• Thursday, July 25, 2024
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Global food prices surge for first time in seven months

Food security requires a grand national strategy

The global food price index has rose for the first time since July 2022, as prices of vegetable oils, meat and cereals outweigh the decline in sugar and grains, the Food and Agriculture Organisation (FAO) reported Friday.

The Food Price Index by the FAO reports that prices of vegetable oils led the increase in March, rising 8.0 percent reaching a one-year high as quotations for palm, soy, sunflower and rapeseed oils all rose.

“Rising international quotations for vegetable oils, dairy products and meat pushed the benchmark index for world food commodity prices up by 1.1 percent in March, its first increase in seven months,” the FAO said in its report.

The food price index, which tracks changes in the international prices of a set of globally traded food commodities, averaged 118.3 points in March, up 1.1 percent from February 117.3 points. Year-on-year, it declined 7.7 percent from the equivalent month of 2023 (128.2 points).

The intentional agency’s vegetable oil price index, a major driver of the surge, rose 130.6 points from its 120.9 points (8.0 percent) in the previous month.

Year-on-year, prices of vegetable oil declined 0.9 percent from the equivalent period in 2023, but is the highest price since the beginning of 2024.

According to the report, low output affecting palm and vegetable oil seasons influenced its prices in the global market. Also, high crude oil prices affected price quotation of vegetable oil.

“International palm oil prices continued to increase in March, underpinned by seasonally lower outputs in leading producing countries that coincided with firm domestic demand in Southeast Asia,” the report noted.

The March dairy price index, also a contributor to the surge, averaged 124.2 points, up 2.9 percent (3.5 points) from February, marking its sixth consecutive monthly increase, however, it declined 2.8 percent below its value last month.

Year-on-year, the diary price index declined 8.2 percent from its equivalent period last year.

“In March, world cheese prices increased the most, reflecting the steady import demand from Asia, higher internal sales in Western Europe leading to the spring holidays, and seasonally falling production in Oceania,” the report stated.

The meat price index plunged 1.7 percent from 111.1 points in February to 113.0 points in March and also declined 1.5 percent in the same month of 2023.

The cereal price index declined 3.0 percent (110.8 points) from February 113.8 points and a significant 20.1 percent in the corresponding month of 2023, as global wheat prices declined for the third consecutive period this month.
This is due to continued strong export competition among the European Union, the Russian Federation and the United States of America.

The agency’s sugar price index declined 5.4 percent from February 140.8 points to 133.1 points in March, after two consecutive monthly increases in January and February.

This decline in sugar prices was on the back of revision to 2023/24 sugar production forecast in India and the improved pace of sugar harvest in Thailand at the final stage of the season. Large exports from Brazil also weighed on world sugar prices.

“However, persisting concerns over the crop in Brazil, negatively affected by prolonged dry weather conditions, continued to exacerbate seasonal trends and limited the price decline,” the international agency said.